On 3 September 2024, the Court of Appeal of the Unified Patent Court (UPC) issued a significant decision in the case between Aylo, as the appellant, and Dish and Sling, as the respondents, focusing on the UPC's jurisdiction and competence.
Facts
Dish holds a patent related to video streaming technology, with Sling as its exclusive licensee. Aylo, the alleged infringer, offers video streaming services. Dish and Sling filed an infringement lawsuit against Aylo and three other entities before the UPC's Local Division in Mannheim. In their claim, they asserted that the Mannheim division had jurisdiction due to Aylo’s global provision of infringing video files and media players, which included offerings in Germany. Aylo disputed this claim and filed a preliminary objection, challenging the UPC's jurisdiction and competence and the Mannheim division’s competence. Dish and Sling opposed Aylo’s objection.
Order of the Local Division
The Local Division ruled in favour of Dish and Sling, confirming the UPC's international jurisdiction. It determined that indirect infringement was at issue due to the distribution of essential video streaming components to customers in Germany. The court reasoned that, at the jurisdictional stage, it was not necessary to establish whether the actions definitively constituted infringement.
Appeal
Aylo appealed the order, arguing that Article 7(2) of the Brussels I Bis Regulation requires a detailed and conclusive argument to demonstrate infringement within the contracting member states. Aylo contended that Dish and Sling failed to prove that the alleged infringing technology specifically targeted users in these countries. Dish and Sling maintained that Aylo's globally accessible website, regardless of server location or domain, justified jurisdiction.
The Court of Appeal analysed Article 7(2) of the Brussels I Bis Regulation, which permits jurisdiction where the harmful event occurred or may occur. The court emphasized that this provision enables claimants to choose the court where the damage occurred or might occur. For internet-based infringement cases, the court where the intellectual property is registered is generally best equipped to assess the claim. The Court of Appeal concluded that the UPC has international jurisdiction in patent infringement cases involving a European patent valid in a contracting member state where damage arises. More importantly, at the jurisdictional stage, it is not necessary to determine whether actual infringement has occurred.
The competence of the Local Division Mannheim was examined under Article 33 of the UPC Agreement (UPCA), which closely aligns with Article 7(2) of the Brussels I Bis Regulation. The Court of Appeal confirmed that both provisions should be interpreted consistently, applying relevant CJEU case law related to Article 7(2) of the Brussels I Bis Regulation also to Article 33 of the UPC. Thus, the Local Division Mannheim was deemed competent to hear the case.
Additional Arguments
Aylo also claimed that the UPC lacked jurisdiction due to a parallel national proceeding initiated by Dish and Sling (a day earlier) in the Regional Court of Munich, relying on the lis pendens rule in Article 30(2) of the Brussels I Bis Regulation. However, the Court of Appeal dismissed this argument, as Aylo failed to demonstrate that the necessary conditions for lis pendens were met. Moreover, the existence of similar proceedings did not automatically preclude UPC jurisdiction, leaving the final decision on competence to the Court's discretion.
Furthermore, Aylo raised a preliminary objection, arguing that the claim was manifestly unfounded. The Court clarified that such objections do not fall within the formal category of preliminary objections. However, the Court acknowledged that the Local Division Mannheim could have addressed this issue using its case management powers. Aylo would not have been able to appeal a case management decision but could have requested a review by the UPC panel.
Conclusion
This case highlights critical aspects of the UPC's jurisdiction and competence under the Brussels I Bis Regulation and the UPC Agreement. In internet-based patent infringement cases, jurisdiction can be established through accessibility within the contracting states, without the need to show specific targeting of users in those countries. Additionally, the decision confirms that the UPC's jurisdiction and competence must be addressed at an early stage, independent of the substantive infringement claim. Understanding these principles is vital for navigating patent litigation within the UPC system.
